Comprehensive telecom expense management (TEM) solutions have been shown to be highly effective in reducing telecom costs, generating strong ROI and paying for themselves in less than one year of operation. An automated invoice management system will generate hard dollar savings and productivity gains.

The value of reviewing invoices for accuracy before paying them is easy to appreciate. But for organizations that receive hundreds or thousands of telecom invoices every month, manually validating every charge on every invoice is a time-consuming and costly process. Whether deployed as an on-premise or outsourced solution, an effective TEM invoice management program includes four essential components: electronic invoice processing, invoice validation, dispute management, and contract negotiation.

Electronic invoice processing

Invoice management solutions are effective to the degree that the data is made available in electronic form. Invoices received in electronic form can be processed more rapidly, accurately, and at lower cost than paper invoices. Electronic invoices can also provide levels of detail that are critical for thorough and accurate analysis, validation, and allocation.

Invoice validation

To fully verify the accuracy of invoices, charges must be validated against three criteria:

• Usage – Were the services billed for actually consumed? Call accounting systems collect Call Detail Record (CDR) data off the telecom switch that can be used to validate costs. Wireless services do not provide this kind of activity log and are typically validated against charge thresholds.
• Contract terms and company policies – Rates applied to delivered services, as well as taxes and other charges, should be validated against terms defined in the carrier contract. Charged activity should also be checked against company policies governing appropriate use.
• Inventory and MACDs – The inventory of services in effect and the technology deployed are constantly changing. Invoices from telecom providers must be validated against what is essentially a moving target.

Dispute management

An automated dispute management system can help you quickly and efficiently work with carriers to achieve credits and/or corrections for discrepancies identified during the invoice validation process. Best-in-class dispute management systems include an automated workflow component that provides full lifecycle tracking of the disputed charges, including disposition, amount recovered, important dates, and more. Invoices with disputed charges can be paid in full with disputes or short paid.

Contract negotiation and optimization

Negotiating favorable rates and selecting service plans that match usage needs are powerful ways to reduce telecom spend. The spend and usage data collected for other invoice management efforts provides valuable insight that can be leveraged to reduce present and future telecom spend. Data gathered from invoice processing reveals how your organization actually uses telecom services, arming you with the information you need to negotiate the most favorable carrier contracts and wireless plans. Invoice management solutions with spend analytics capabilities can help you analyze this information and project future requirements and costs. Armed with this information, you can enter negotiations knowing exactly what you need, and what you can afford to leave on the table. You will be able to make informed decisions that result in significant cost reductions – such as moving to pooled plans or limited wireless data services – without jeopardizing overall quality of service.

Hard dollar savings and more

An invoice management system encompassing electronic processing, invoice validation, dispute management, and contract negotiation can generate immediate hard dollar savings, such as elimination of overcharges, as well as long-term savings resulting from stronger contract negotiation and compliance. Invoice management helps organizations understand and control their telecom usage and spend.

Reducing Telecom Costs: Why Invoice Management is the Best Place to Start
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Key facts:

• Telecom costs continue to rise with an increase of 2,5% in 2008 compared to 2007
  • Strong increase in purchase of flat-fee bundles for both voice and mobile data
  • Data cost category continues to grow while smart phones become more popular
  • Number of mobile devices increase by 13%
• Private use of corporate mobiles is common
  • 28% of call costs are private
  • Holiday destinations are top roaming countries in July & August\
  • New Year’s Day and Bloody Friday (global stock exchange decline) are top days for SMS volume
• Regional Differences
  • Roaming continues to represent an important cost consisting 24-28% of the telecom cost in European countries, whereas USA is only 13%;
  • SMS and Service Numbers (Voicemail, Number Information) are most popular in the USA and UK, when compared to European continental countries (Germany, Netherlands).

Find all results here: http://www.ezwim.com/news/ezwim-telecom-monitor-2008

My take:

• Mobile/wireless cost are still on the rise;
• Enterprises follow the trends in the consumer markets; flat fee voice & data bundles grow strongly in popularity;
• Strong growth of mobile data usage are pushed by private usage; mobile data is being used, next to corporate email for downloading music, keeping in touch with social network and using YouTube, Twitter, MSN etc.

What to do?

• Get insight into what you spend and how you are spending it on a global level;
• Increase end user awareness of their private usage and make them responsible of their own private costs (private/business cost allocation), and create clear policies;
• Centralize cost and service management globally and automate the processes (Install, Move, Add, Change) with your service provider.

Many TEM vendors have a national service and approach and must seek strategic partnerships (or build themselves) to be compliant to the enterprise trend moving away from national to global services. An example of this trend is the announcement of the global partnership between Ezwim and Movero Technology to deliver a joint lifecycle management service globally. The joint service is based on the full integration of the respective Software-as-a-Service (SaaS) platforms.

The integrated offering will be available in Q1 2009. The benefit to enterprises: a total lifecycle management approach for policy development, procurement, administration of services and expense management across multiple carriers, allowing for more effective cost control, service and support.

Find full results here,  

Some topline findings:

• Telecom costs are on the rise and increase 18% in 2007 compared to 2006
• The data cost category doubled since 2006 to reach 8% of telecom costs.
• Roaming costs represent 31% of telecom cost
• Private use of the corporate mobile is common:
  • 30% of calling cost is private;
  • Holiday countries are no.1 roaming destinations in July & August;
  • New Year’s Day and Valentine Day are the Top 2 days for SMS volume.
• Private usage of the company mobile is on the rise: growth of 8,3% since 2006 

My take:

• Cost are still on the rise, and grow fast, contrary to general belief;
• Mobile data is becoming mainstream…..it moves from the board room to the blue collar employees;
• Benefits of new EU regulation (cap on roaming tariffs) in 2007 not proven, as roaming declined faster in 2006 without EU regulation;
• Private usage is big and fastest growing part of cost…..mobile data is being used, next to corporate email, for downloading music, keeping in touch with social networks, and browsing the internet.

In Q1 2009 a full analysis of 2008 can be expected. Stay tuned!

Drop me a line (rvanvalkengoed@ezwim.com) if you are looking for more insight or more information on the analysis!

MANASSAS, Va., Nov 20, 2008 /PRNewswire via COMTEX/ — The Telecom Expense Management Industry Association (TEMIA), the premiere organization for the telecom expense management industry, announced today the appointment of Joe Basili as Managing Director. This appointment highlights TEMIA’s deep commitment to grow the association, raise awareness of the values and benefits of TEM solutions, further its mission of optimizing the telecommunications supply chain, and help organizations achieve ideal results from TEM programs.

“Joe brings a background that is well suited for this work with more than 20 years experience in marketing, launching and growing new businesses, and developing research for the TEM market. He also brings positive relationships with existing members, potential new members, enterprises, and analysts,” stated Dave Spofford President of TEMIA.

This bears a comment.

BRAVO! I dashed off a quick email to the TEMIA board late yesterday applauding this appointment. I don’t know Joe all that well, but I know his background and I know a little about how associations work or perhaps more aptly don’t work. This was a very smart thing for TEMIA to do.

They limped along for two years without a strong director and have suffered operationally because of it. The CEOs running TEMIA are very busy running their own shops, they scarcely have the time to run an association. Combine that with competitive suspicions and healthy ego’s and it was no wonder TEMIA was not gaining the traction it needed to develop to bring the industry forward.

Without a strong, independent director, TEMIA was going to continue to be “all talk and no action”. A point made over and over by CEOs I have talked to both in and out of the association. In many ways, TEMIA’s Achilles heel has been a competitive undercurrent around market share. It has hamstrung it growth and purposefulness in any number of ways.

Joe’s mandate ought to be to double or even triple the size of the association through creation of a solid set of benefits and lowering of the dues structure. There needs to be an infusion of new ideas from a new group of providers.

Look. VC backing has allowed the industry to get off the ground mat well as the association itself, If TEMIA’s charter was to educate the marketplace it must move well beyond the Fortune 500 (if they don’t know about TEM by now they never will). TEMIA has to focus its efforts downstream. The great opportunity for TEM growth is in the mid-market, where there are lots of greenfields and thus less competitive pressure even though there are many more TEM providers.

But here is the rub. For the top tier to move aggressively into the midmarket, they need to be able to speak with one voice to the carriers about Bill formats and e-bonding and a standards regimen on refunds. It is those that among others that drive the automation and scalability needed to play in the mid-market.

TEMIA needs more members and more dues in order to effectively wage that battle.

More members may dilute the power of TEMIA’s charter class; “empowering” “lesser competitors” may seem counterproductive; having more members might seem unwieldy. but it is also a sign of industrial maturity. Those companies deserve a seat at the table and need to be heard.

There are some folks who just need to get over the idea that it all about market share. There are too many untapped wells, too many vendors to even bother trying to make this into a market share game. It is about profitability and referencability. It is about the need to relieve competitive price pressure and lowering the “cost of sale”. The paradigm needs to change because the dropping prices to win a deal among the largest companies has robbed profitability from most TEMIA members.

I would argue that the way to market success is through redefining the target audience and that can only come through an industry association that truly understand the broader market issues. That means a larger, more inclusive association but that is a trade-off that TEMIA needs to make, if it want to drive the industry forward. And it is a trade-off that cannot be done without a strong managing director leading the charge.

So again I say “Bravo” to the Association for this great leap forward and congratulation to Joe Basili on this great opportunity,

Steve Perkins
TeleFirma.biz

Leading analysts like Gartner (see link below) and Forrester advise enterprises to start adopting Telecom Expense Management (TEM). According to Jeffrey Kaplan it is also a good time to adopt Software-as-a-Service (SaaS).  In his article “Time is right to consider SaaS and Cloud Computing” he elaborates on the main advantages of SaaS for enterprises; like the speed of implementation and the pay-as-you-go basis of the products.

I believe that the time is indeed right for SaaS services and Telecom Expense Management is one of these services that is well suited to be offered in a SaaS model. It allows enterprises to start managing telecommunications expenses in a matter of weeks and allows for well-founded decisions on how costs can be decreased in a structural way that have a positive impact on their organizations.
My quick and dirty business case for TEM in a SaaS model:

• Savings: >20%
• CapEx: 0 $
• Implementation: weeks
• Savings / Cost Ratio: 7/1
• All the benefits of a managed service…

More info:

• Gartner: Strategic Companies Will Use Business Intelligence
• Time is Right to Consider SaaS and Cloud Computing